Sears Gold MasterCard
Rip-off Impossibility of closing account due to default interest rate trap

Sears Gold MasterCard (Citibank) has created an interest rate trap for consumers who cannot pay down their accounts every month. Here is how it works.

When the cards were originally issued the fees and interest seemed reasonable. But over time, notices came that stated that the "terms of the agreement" were being changed. They issued a notice a while back that drastically changed the interest rate on a whole group of their customers. This change had nothing to do with any consumers credit or if the account was up to date.in fact, it was simple greed.

Now they have again increased the interest rates, and they now stand at 16.99%. Every time one of these notices came, they also stated that if you did not agree with the new terms, you could "op-out" by closing the account. You would have to abide by the old terms, and you account was really closed in that you could no longer use the cards - but the illusion was there that you had a choice of accepting the new terms or of closing the account.

However, with this last increase I decided that enough was enough since our account was in good standing and inflation over the last several years had been essentially zero. This was a blantant grab for money.

But there is a clever catch in the action of closing the account. If a consumer closes the account, it is suddenly grouped with the defaulted accounts and is charged the default rate, which in this case is 27.99%. So my choice is actually to be forced to pay 16.99% or 27.99% on my outstanding balance. Not only that, but there is no limit to how much they can raise the rates. If they decide tomorrow to raise the rates to 47% for our accounts, they can assure themselves of customers by raising the default rate to 67%. Nothing is stopping them raising the rates to astronomical levels.

Unfortunately, this provision is in both the new terms and the old terms. No doubt it was put in some time ago, buried in the middle of 5 or 6 pages of extremely fine print. At the time, no one would have connected the dots to imaging a situation in which this company could arbitrarily raise interest rates to whatever levels they desired without the fear of having their customers flee to other companies. They have created a situation in which their customers are legally bound to them no matter what they raise the interest rates to. It is essentially "interest slavery" and it should be illegal.

Company: Sears Gold MasterCard
Country: USA
State: Ohio
City: Cleveland
Phone: 8006698488

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